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NAMA Commercial Mortgage Financing Package

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NAMA Commercial Mortgage Financing Package Ì Ì NAMA COMMERCIAL MORTGAGE FINANCING PACKAGE 1. NAMA VENDOR FINANCE Vendor Finance will be made available over the worthy counterparties through the provision of a Vendor Finance will be made available on next four years. debt package connected to the sales process. a case by case basis in respect of the sale In 2012, NAMA announced that it would provide of commercial property by NAMA debtors; Vendor Finance to purchasers of commercial The availability of Vendor Finance is a direct Vendor Finance is a well-established in the case of enforcement, by appointed properties held by its debtors and receivers in response by NAMA to the lack of liquidity in debt mechanism used by existing financial insolvency practitioners; or by NAMA both Ireland and the United Kingdom (UK). NAMA markets in Ireland and the UK and is designed to institutions to attract new equity and to directly where it has assumed ownership of envisages that up to €2 billion/£1.6 billion in support a timely sale of real estate/loans to credit- support transactional activity in target markets. the asset. 2. COMMERCIAL TERMS producing, including for example, office ÌÌSatisfactory location buildings, shopping centres, retail warehouses, There is no single standard set of terms for and industrial estates. ÌÌMaximum 4 year term Vendor Finance which NAMA will offer to parties acquiring commercial property. Terms The underwriting of the NAMA loan ÌÌFirst ranking security being retained by quoted will vary to reflect the attributes of commitment will be based on the anticipated NAMA various commercial property categories and current asset value (loan to value maximum) individual properties, the relative strengths and the future recurring rent cash flows from ÌÌNo subordination of NAMA’s position relative of tenants and leases, and the strength of the the occupational tenants. to new investor money counterparties/property purchasers. Only strong and reputable counterparties will be Where finance for the acquisition of ÌÌMinimum interest margin of 350 basis points considered. development properties is not available, NAMA may, in certain limited cases, be ÌÌDebt Service Covenant in line with cashflows For prime investment properties, that is prepared to consider the application of Vendor on a case by case basis. properties which are well located and have Finance. In considering the availability of strong tenants on long leases at realistic rents, Vendor Finance for development properties, NAMA may offer up to 75% of the purchase considerations including the following will be 4. NEXT STEPS price for a period of up to 7 years at a typical relevant: interest margin of 3% over cost of funds. Whilst the availability of Vendor Finance ÌÌSignificant equity contribution from will usually be marketed as part of the sales the purchaser such that loan to value at process relating to a qualifying asset/loan, 3. ASSETS FOR WHICH origination does not exceed 60% NAMA is open to considering proposals, VENDOR FINANCE IS on an individual basis, from prospective AvaILABLE ÌÌAcceptable counterparty with a credible purchasers in respect of commercial plan for the property properties held by its debtors or receivers in NAMA’s first vendor finance transaction – used to finance In general there will be a focus on investment both Ireland and the UK. Interested parties the purchase of No. 1 Warrington Place in Dublin (pictured assets (single buildings or portfolios) with a ÌÌA proven operator who can successfully can contact NAMA using the following email above) – was completed this year and there are currently a financial value of a minimum of £10 million, develop out the property or improve it for address: [email protected] number of other transactions under consideration. which are well tenanted and income- onward sale 2.
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